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Sweeney: N.J. public worker pension amendment may be doomed for this year

Friday, August 5, 2016   (0 Comments)
Share | 08/05/16

Senate President Stephen Sweeney on Thursday sent the strongest signals yet that a constitutional amendment protecting government worker pensions won't appear on the November ballot. As the deadline for the referendum to be placed before the electorate approaches and the drama ramps up, Sweeney made the case for why the amendment, may have to wait. "The lack of a responsible Transportation Trust Fund plan hangs like an axe over this process," he said. "Until we have, and I can't make this any clearer, until we have resolved the Transportation Trust Fund impasse, we can't in good conscience put a constitutional guaranteed pension payment on the ballot."

The Senate president sponsored and championed the amendment, but he stressed Thursday that circumstances have changed. A stalemate between the Legislature and governor over Transportation Trust Fund tax cut plans puts into question whether the state will be able to afford the pension payment plan, he said. "It would be foolish and irresponsible to ignore the unique fiscal challenges that we have," he said Thursday. Sweeney said he wants to put the Senate bill up for a vote but won't do that until he's lined up enough votes to override Christie's expected veto. Sweeney said Thursday he thinks he's just one vote short.

Sweeney said his proposed tax cuts — eliminating the estate tax, raising the retirement income tax exclusion, increasing the Earned Income Tax Credit and creating tax breaks for commuters and veterans — would stretch the state budget to its limits. He said state can't afford the governor's governor's offer to roll back the sales tax from 7 percent to six percent and also raise the retirement income tax exclusion, which carries a $1.9 billion price tag.

An Office of Legislative Services analysis obtained by NJ Advance Media of the tax plans shows that under the Senate plan, natural growth in revenues would initially pay for the increased pension payments and the tax cuts with a few hundred million dollars to shovel to reserves or other programs A $20 million deficit would open up in 2021 and a $147 million shortfall in 2022. Pairing the pension amendment with Christie's plan would result in a $390 million shortfall by next year. That deficit would widen to nearly $1.2 billion by 2022, according to the OLS. The analysis of both proposals assume tax collections would grow by 3 percent each year.

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